2018 lam research investor meeting

Copyright © 2018 Lam Research Corp.

March 6, 2018

2018 INVESTOR MEETING

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This presentation and the accompanying discussion contain “forward-looking statements” under U.S. securities laws. Forward-looking statements include any statements that are not statements of historical fact. Examples of forward-looking statements include, but are not limited to: (1) anticipated business, financial statement and financial results, metrics and opportunities, including guidance, whether actual or pro forma; (2) economic, market, industry (whether globally or by country) and industry segment, and technology expectations and demands; and (3) our business, product, customer support, capital allocation/return or growth plans and strategies, including our ability to successfully execute them or otherwise deliver value for customers and stockholders. Forward-looking statements speak only as of the date they are made and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed, including the factors discussed in our filings with the Securities and Exchange Commission (“SEC”) such as our Annual Report on Form 10-K for the fiscal year ended June 25, 2017 and Quarterly Report on Form 10-Q for the quarter ended December 24, 2017. You should not place undue reliance on forward-looking statements. Lam undertakes no obligation to publicly update any forward-looking statements.

2 Copyright © 2018 Lam Research Corp.


TODAY’S AGENDA

Martin AnsticeChief Executive Officer

Value Creation and Capture

Tim ArcherPresident &

Chief Operating Officer

Executing forOutperformance

Doug BettingerEVP &

Chief Financial Officer

Delivering Profitable Growth and Returns

Question & Answer Session

Martin Anstice Tim Archer

Doug Bettinger

VALUE CREATION AND CAPTURE IN A DATA ECONOMY

Chief Executive Officer

Martin Anstice

Copyright © 2018 Lam Research Corp.4


INCREASING SEMICONDUCTOR

RELEVANCE

INNOVATION-DRIVEN DEMAND FOR TECHNOLOGY

LAM’S VISION AND STRATEGY


TECHNOLOGY TRANSFORMING THE WORLD

ConnectMore people, more devices, more often

CloudMassive scale and efficiency

ComputeFaster and enabling

CostDemand

accelerator


DATA ANALYTICS DRIVE ECONOMIC AND SOCIAL VALUE

Security

Healthcare

Climate Change Transportation

Education

Food & Water


OUR CUSTOMERS ASPIRE TO MAKE THE WORLD A BETTER PLACE

Cognitive decision support opportunity:

$2T by 2025

“Intel makes possible the most amazing

experiences of the future”

“Transforming how the world uses information

to enrich life”

“Inspire the World, Create the Future”

“Committed to people, committed

to the future”

“Together, we work to enrich lives and shape the future”

“We are committed to making our tomorrow smarter and happier”

Source: Company reports and websites. The above logos and public statements may be trademarks of the respective companies. Lam Research is not affiliated with such entities.

THE RISING DATA ECONOMY


Mainframe Computing1985 - 1995

Compute Proliferation

1996 - 2005

Global Connected User Platform

2006 - 2015

Data Economy

2016 & beyond

megabytes gigabytes exabytes zettabytes

Artificial Intelligence Inflection

MORE DATA ANALYZED = BETTER QUALITY ARTIFICIAL INTELLIGENCE


70%

75%

80%

85%

90%

95%

100%

More computeMore memory

Data Volume Increases AI Accuracy Compute & Memory Enable AI

0%

20%

40%

60%

80%

100%

100 1,000 10,000 100,000

Anal

ysis

Acc

urac

y

Data Volume

Anal

ysis

Acc

urac

ySource: Michael Nielsen, ImageNet Challenge


Smart Home Smart Industry Mobile Autonomous Car Healthcare Robots

50 billionconnected devices

1 petabyteof data per day

1 exabyte of traffic per day

4 terabytes per car per day

35 millionremotely monitored

patients

43 millionnew service robots

by 202067 zettabytesof data generated

MORE DATA GENERATED, STORED, ANALYZED

Source: Lam Research, Cisco, Samsung, Intel, Qorvo, mhealthintelligence, International Federation of Robotics


DATA CENTER

DRAM30%

2017-2021 CAGR

NAND50%

DRAM

2018Server

PCConsumer

Mobile

MobileNAND

Consumer

2007

Consumer

2018

SSD

SSDMobile

PC

2007

ServerMobile

Consumer

Source: Lam Research estimates. CAGR = compound annual growth rate; SSD = solid-state drive


Semiconductor Content Potential

Fully automated car

≈Average server

Units Potential

>8x more cars than servers today

AUTONOMOUS VEHICLES

DRAM>35%

2017-2028 CAGR

NAND>50%

Source: Lam Research estimates

INCREASING WFE INTENSITY TO SUPPORT BIT SUPPLY GROWTH


WFE Needed to Achieve 1% Bit Supply Growth

Source: Lam Research estimates. WFE = wafer fabrication equipment

NANDDRAM

COMPELLING UNIT COST ECONOMICS

15 Copyright © 2018 Lam Research Corp. Source: WSTS, Gartner, Lam Research estimates

Economics of DRAM

Bit Growth

20x

Cost per Bit

90%

20% 1x

2007

2018 $13B

WFE

$13B

Economics of NAND

Bit Growth

50x

Cost per Bit

125%

45% 1x

2007

2018 $15B

WFE

$6B


SEMICONDUCTORS GROWING IN STRATEGIC RELEVANCE TO GLOBAL ECONOMY

0.0%

0.1%

0.2%

0.3%

0.4%

0.5%

0.6%

0.7%

Data EconomyEstablishing global,

connected user platformProliferation of computing

Source: WSTS, IMF, Lam Research estimates

Semiconductor Revenue as a % of World GDP


0.0%

0.1%

0.2%

0.3%

0.4%

0.5%

0.6%

0.7%Semiconductor Revenue as a % of World GDP

Data EconomyEstablishing global,

connected user platformProliferation of computing

$100BRevenue added by top semiconductor customers last 5 years

$200BRevenue added by top cloud companies last 5 years

SEMICONDUCTORS GROWING IN STRATEGIC RELEVANCE TO GLOBAL ECONOMY

Source: WSTS, IMF, Lam Research estimates

0%

20%

40%

60%

80%

100%

120%

140%

160%

$0

$10

$20

$30

$40

$50

$60

CUSTOMER ECONOMICS COMPELLING TO RAMP WFE INVESTMENTS

WFE % of SemiconductorOperating Profit

WFE

($B)

Source: Company reports, Lam Research estimates18 Copyright © 2018 Lam Research Corp.

HEALTHY MULTI-YEAR DEMAND PROFILE ACROSS SEGMENTS


2017 2021

≥20 nm

≤10 nm

2017 2021

≥mid 2x

≤1y nm

20 nm/1x nm

Source: Lam Research estimates. WSPM = wafer starts per month; data represents shipped capacity

WSP

M

Foundry/LogicDRAM

2017 2021

Gen 5+

2D NANDW

SPM

NAND

3D NANDGen 1/2/3

Gen 3

Gen 4 WSP

M

14/16 nm

VISION TO DRIVE VALUE CREATION


Solve Our Customers’

Grand Challenges

Createand Capture

Value

Investin the Future

of the Company

DeliverValue Creation

for Stockholders

Deliver disruptive technologies to enable success of customers

Compete for and wina greater share of

customers’ investments

Continuously strengthen our product and services pipeline

Optimize capital allocation between investments

and capital return


GRAND CHALLENGES ARE OPPORTUNITIES FOR A DIFFERENTIATED PORTFOLIO

High Aspect RatioStructures

Selectivity

Process Complexity

Feature-Scale Uniformity

Damage

Output Density

Wafer-Scale Uniformity

Product Cost

Killer Defects Metal Contamination

Sustainability

Repeatability

Atomic-Scale Precision

Surface Integrity

Affordability andSustainability

Reci

pes

Years

Lam’s Law

DELIVER GROWTH AND SHAREHOLDER VALUE


50%Plan to return at least

0%

5%

10%

15%

20%

25%

30%

10

20

30

40

50

60

70

2013 2014 2015 2016 2017 2018F 2021F

WFE

($B)

of Free Cash Flowover the next five years

~14%

Source: Lam Research estimates

Lam Ship % of WFE

~21%

~27%

STRATEGY FOR PROFITABLE GROWTH AND OUTPERFORMANCE


Business UnitDeliver unit process and service excellence

Multi-Business UnitProvide additional value through integration and co-optimization

EcosystemCollaborate to accelerate innovation and opportunity

Adjacent MarketsLeverage core competencies in adjacent markets

SUMMARY


Focused Vision and Strategy

Healthy Industry

Continued Outperformance

EXECUTING FOR OUTPERFORMANCE

President & Chief Operating Officer

Tim Archer



INFLECTIONS & NEW PRODUCTS DRIVE GROWTH

FOUNDATION FOR SUSTAINABLE

DIFFERENTIATION

INSTALLED BASE OPPORTUNITIES

PROVIDE STABILITY

CONSISTENT TRACK RECORD OF ADDRESSABLE MARKET GROWTH

0%

5%

10%

15%

20%

25%

30%

35%

40%

Lam SAM % of WFE

Copyright © 2018 Lam Research Corp.27 Source: Lam Research estimates. SAM = served addressable market


TECHNOLOGY INNOVATION DRIVES GROWTH

EUV = extreme ultraviolet; ALD = atomic layer deposition, ALE = atomic layer etching

Lam’s Leadership

High aspect ratio etchHigh-productivity platformsStress controlSelective etch

3D NAND ALD tungsten word lineTransistor spacer depositionSelf-aligned contact ALE

Cobalt interconnect formationSi-Ge gate-all-around formationPatterning new memory materials

Spacer film depositionEUV absorption layersSelective depositionAdvanced process control

Installed Base Productivity

Multiple PatterningVertical Scaling

Atomic-Scale Processing New Materials

GROWTH


TECHNOLOGY INFLECTIONS DRIVING SAM GROWTH

30 Copyright © 2018 Lam Research Corp. Source: Lam Research estimates

Foundry/LogicNANDDRAM

0.0

0.5

1.0

1.5

2.0

14 nm 10 nm 7 nm 5 nm 3 nm0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2DNAND

32L 48L 64L 96L 128L0.0

0.5

1.0

1.5

20 nm 1x 1y 1z(2016-2018)

(2017-2020)

(2019-2022)

(2015-2017)

(2016-2018)

(2018-2021)

(2014-2016)

(2016-2018)

(2018-2020)

(2020-2022)

(2014-2016)

(2020-2022)

(2014-2016)

Normalized SAM per Wafer, Greenfield Investments

(2020-2022)

FOUNDATION OF LAM’S MARKET MOMENTUM


Culture of innovation and continuous

improvement

Strategic, substantive, andfocused investment in R&D

Mutual trust and respect that fosters teamwork and collaboration

Think: customer, company, individual

TechnologyLeadership CollaborationProductivity Speed to Solutions

FOUNDATION OF LAM’S MARKET MOMENTUM


Flex® high aspect ratio etch

Hydra® process variability reduction

Striker® and ALTUS®

atomic layer deposition

Corvus™ extreme edge control technology

SABRE® copper and cobalt deposition

Early customer engagement

Close litho ecosystem partnerships

Customer data analytics engagement

Activities with consortia and academia

VECTOR® high-productivity platform

Reliant™ refurbished systems

Installed base productivity solutions

Advanced equipment and process control

Coventor® virtual fabrication

Rapid prototyping through product lifecycle

Multi-product adjacent process capability

Extensive R&D infrastructure investments

TechnologyLeadership CollaborationProductivity Speed to Solutions

DIFFERENTIATION


FOCUSED STRATEGIES TO DRIVE OUR MARKET MOMENTUM


2017 (%) 2021 Growth Targets

DEPOSITION Low 40’s 4% - 8%

ETCH Mid 50’s 4% - 8%

Segment Market Share

CUSTOMER SUPPORT BUSINESS OPPORTUNITIES


Lam’s Leadership

Productivity upgrades

Spare parts lifecycle management

Cost reduction through continuous improvement

Advanced solutions for capital efficiency

Cost reductionChallenge

Advanced system analytics

Chamber matching

Performance Plusparts

Defect reduction

Variability control

Reliant™ for non-leading-edge applications

Solutions for MEMS, power, RF, and mixed-signal devices

Enabling processes for new materials

Novel requirements

DRAM & NAND Foundry/Logic IoT

Upgrades

Advanced Service Products

Spares

Services

DELIVERING VALUE TO CUSTOMERS THROUGHOUT THE EQUIPMENT LIFECYCLE


Installed Base Revenue Opportunity > Initial System Revenue

Upgrades

Advanced Service Products

Spares

Services

>25 years

RepurposeShip new system

Repurpose

GROWTH AND STABILITY IN THE INSTALLED BASE BUSINESS

Copyright © 2018 Lam Research Corp.37 Source: SICAS, SEMI World Fab Forecast, Lam Research estimates

2003 – 2017

IndustryWafer Starts

>300%Growth

~150%Growth

>400%Growth

Lam Installed BaseRevenue

Lam InstalledBase

GROWTH AND STABILITY IN THE INSTALLED BASE BUSINESS


2013 – 2017

Source: SICAS, SEMI World Fab Forecast, Lam Research estimates

IndustryWafer Starts

~10% Growth

~90%Growth

Lam InstalledBase

~50%Growth

Lam Installed BaseRevenue

PLAN FOR $15B OF REVENUE IN 2021 AT FLAT WFE


>$1B of incremental revenue >$1B incremental revenue>$1B incremental revenue

30%

34%

38%

42%

46%

50%

54%

2013 2015 2017 2021F0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

2013 2015 2017 2021F 2013 2015 2017 2021F

SAM

SAM Share to WFE CSBG

Revenue

Installed Base(N

orm

aliz

ed)

Corporate Market Share

Technology Growth Drivers

Differentiated Solutions

Growing RecurringRevenues

Source: Lam Research estimates. 2021 plan assumes WFE flat with 2018.

DELIVERING PROFITABLE GROWTH AND RETURNS

EVP & Chief Financial Officer

Doug Bettinger


FINANCIAL OUTPERFORMANCE CONTINUES

2017

Achieved >1.5X the industry growth rate

Grew Operating Income at ~1.8X Revenue

Delivered >94% EPS growth year over year

Generated >$2B in Operating Cash Flow

41 Copyright © 2018 Lam Research Corp.Financial outperformance metrics shown for CY 2017 relative to CY 2016 and are presented on a non-GAAP basis.

A reconciliation of U.S. GAAP results to non-GAAP results can be found at the end of this presentation.

WFE

LamRevenue

LamOp Inc

Year-Over-Year Growth RateCY 2016 to CY 2017

HISTORICAL OUTPERFORMANCE TRACK RECORD

Compound Growth RateCY 2012 to CY 20172012 – 2017

Achieved >2X WFE CAGR

Grew Operating Income at >1.9X Revenue CAGR

Delivered 46% Non-GAAP EPS CAGR

Generated >$6.7B in Operating Cash Flow

WFE

LamRevenue

LamOp Inc


Financial outperformance metrics shown for CY 2017 relative to CY 2012 and are presented on a non-GAAP basis. Data reflect financial contribution from Novellus Systems following Lam’s acquisition on June 4, 2012.A reconciliation of U.S. GAAP results to non-GAAP results can be found at the end of this presentation.

EXECUTING ON OUR PROFITABLE GROWTH COMMITMENTS


$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000Millions Millions

$0

$2

$4

$6

$8

$10

$12

$14

$16Millions

Shipments Revenue Non-GAAP Operating Profit*

Non-GAAP Diluted EPS*

* A reconciliation of U.S. GAAP results to non-GAAP results can be found at the end of this presentation.

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000


1 Data are presented on a non-GAAP basis. A reconciliation of U.S. GAAP results to non-GAAP results can be found at the end of this presentation.2 The Company defines ROIC as tax-effected annualized adjusted operating profit divided by invested capital. All years represented used annualized non-GAAP Operating Income and non GAAP tax expense for QDec of each year. Tax rate for QDec'17 is normalized and excludes all benefit recorded by the Company as a

result of the U.S tax reform. Invested capital is defined as equity plus debt and capital leases, less cash, cash equivalents, and investments.

0%

10%

20%

30%

40%

0%

10%

20%

30%

40%

$0

$200

$400

$600

$800

$1,000

$1,200

0%

20%

40%

60%

80%

Lam SAM as % of WFE OpEx as % of Revenue1 R&D Investment1 ($M) Return on Invested Capital2

Execute Control Allocate Utilize

Grow market share and SAM

Balance scaling withspending requirements

Prioritize investmentsin leading-edge R&D

Create value from invested capital

BUSINESS MODEL FLEXIBILITY


$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

2014 2015 2016 2017

Shipments Variable Portion of Total Costs Free Cash Flow

$0

$500

$1,000

$1,500

$2,000

2014 2015 2016 2017

Millions Millions

FixedCosts

VariableCosts

Fixed and variable costs estimated for 2017

TARGET MODEL

Copyright © 2018 Lam Research Corp.46Financial model presented on a non-GAAP basis.

A reconciliation of U.S. GAAP results to non-GAAP results can be found at the end of this presentation.

CY 2017 Actual

CY 2021 Financial Model

WFE Assumption $47B Flat to 2018

Revenue $9.6B $14.5B – $15.5B

Non-GAAP Operating Margin 28.7% 32% – 33%

Non-GAAP Diluted Earnings per Share $13.70 $23 – $25

Free Cash Flow $1.8B 28% – 29%

RETURNING VALUE TO SHAREHOLDERS

Generated over $5.6B in Free Cash Flow from 2012 to 2017

Cumulative investment in R&D and CapEx of ~$6.0B since 2012

Initiated quarterly dividend of $0.18/share in 2014, increasing over time to $0.50 in 2017

Executed ~$4.4B in share repurchases from 2012 to 2017

Returned ~90% of FCF in dividends and share repurchases from 2012 to 2017


1 Data reflect financial contribution from Novellus Systems following Lam’s acquisition on June 4, 2012.2 Data are presented on a non-GAAP basis. A reconciliation of U.S. GAAP results to non-GAAP results can

be found at the end of this presentation.

Cumulative Investments and Capital Return1

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

2012 2013 2014 2015 2016 2017

DividendShares RepurchasedCapExR&D

Millions

2

CAPITAL ALLOCATION STRATEGY


Plan to return at least 50% of Free Cash Flow over the next five years

Increase quarterly dividend 120% to $1.10/share, with a bias to grow over time

$2B additional share repurchase authorization; $4B total share repurchase authorized since Nov 2017

CapitalReturn

Dividend

Share Repurchase


Continuing to invest for growth and success with value-creating strategies

Concluded an extraordinary year in 2017, with record performance in shipments, revenue, and non-GAAP EPS

SUMMARY

Increasing our capital allocation strategy in line with company growth


Q&A SESSION

Tim ArcherPresident &

Chief Operating Officer

Doug BettingerEVP &

Chief Financial Officer

Martin AnsticeChief Executive Officer

Satya KumarVP, Investor Relations

APPENDIX - RECONCILIATION


Twelve Months EndedDecember 24,

2017U.S. GAAP net income $ 1,681,872 Pre-tax non-GAAP items:

Amortization related to intangible assets acquired through certain business combinations - cost of goods sold 86,456Amortization related to intangible assets acquired though certain business combinations - selling, general and administrative 65,653Cost associated with business process reengineering - selling, general and administrative 9,565Business combination acquisition- and/or integration-related costs - selling, general and administrative 2,029Amortization of note discounts - other expense, net 18,799

Net tax benefit on non-GAAP items (22,633)Income tax expense resulting from tax reform 756,889Net tax benefit on conclusion of certain tax matters (109,744)Non-GAAP net income $ 2,488,886.00 Non-GAAP net income per diluted share $ 13.70

U.S. GAAP number of shares used for diluted per share calculation 184,859Effect of convertible note hedge (3,184)Non-GAAP number of shares used for per diluted share calculation 181,675

Reconciliation of U.S. GAAP Net Income and Dilutive Shares toNon-GAAP Net Income and Number of Dilutive Shares

(in thousands) (unaudited)




2016U.S. GAAP net income $ 999,016 Pre-tax non-GAAP items:

Amortization related to intangible assets acquired through certain business combinations - cost of goods sold 85,000 Costs associated with rationalization of certain product configurations - cost of goods sold 6,127 Novellus acquisition-related inventory fair value impact - cost of goods sold 128 Costs associated with campus consolidation - research and development 11,319 Product rationalization - research and development 1,650 Restructuring charges - research and development 115 Amortization related to intangible assets acquired though certain business combinations - selling, general and administrative 64,333 Business combination acquisition- and/or integration-related costs - selling, general and administrative 43,565 Litigation settlement - selling, general and administrative 4,000 Restructuring charges - selling, general and administrative (85)Gain on sale of real property, net of associated exit costs - selling, general and administrative (15,223)Amortization of note discounts - other expense, net 28,409 Amortization of bridge loan issuance costs -other expenses, net 20,270 KLA-Tencor acquisition funding interest expense, net - other expense, net 24,212 Costs related to early termination of KLA-Tencor acquisition funding - other expense, net 34,518

Net tax benefit on non-GAAP items (58,559)Net tax benefit on conclusion of certain tax matters (3,017)Change to income tax benefit from court ruling (887)Non-GAAP net income $ 1,244,891 Non-GAAP net income per diluted share $ 7.06








Amortization related to intangible assets acquired through certain business combinations - cost of goods sold 85,072 Novellus acquisition-related inventory fair value impact - cost of goods sold 2,149 Impairment of long-lived assets - cost of goods sold 9,821 Restructuring charges - cost of goods sold 371 Restructuring charges - research and development 4,240 Amortization related to intangible assets acquired though certain business combinations - selling, general and administrative 64,332 Business combination acquisition-related costs - selling, general and administrative 17,392 Restructuring charges - selling, general and administrative 5,021 Goodwill impairment - selling, general and administrative 79,444 Amortization of note discounts - other expense, net 36,148 Amortization of bridge loan issuance costs -other expenses, net 13,573

Net tax benefit on non-GAAP items (43,912)Net income tax expense (benefit) on resolution or additional accrual for certain tax matters 954 Income tax benefit related to tax extenders, primarily the research and development credit (13,603)Change to income tax benefit from court ruling (21,925)Non-GAAP net income $ 1,088,292 Non-GAAP net income per diluted share $ 6.29








Amortization related to intangible assets acquired through certain business combinations - cost of goods sold 85,534 Costs associated with rationalization of certain product configurations - cost of goods sold 6,455 Novellus acquisition-related inventory fair value impact - cost of goods sold 3,268 Synthetic lease impairment - cost of goods sold 1,558 Amortization related to intangible assets acquired though certain business combinations - selling, general and administrative 65,250 Restructuring charges - selling, general and administrative 1,915 Costs associated with rationalization of certain product configurations - selling, general and administrative 3,008 Costs associated with disposition of business - selling, general and administrative 1,103 Impairment of long lived asset - selling, general and administrative 4,000 Synthetic lease impairment - selling, general and administrative 5,356 Gain on sale of real estate (83,090)Amortization of note discounts - other expense, net 33,795 Net gain associated with the disposition of business - other (income) expense (4,331)

Net tax benefit on non-GAAP items (16,512)Net tax benefit on conclusion of certain tax matters (302)Income tax benefit related to tax extenders, primarily the research and development credit (11,094)Net tax benefit on valuation allowance release (2,811)Non-GAAP net income $ 808,914 Non-GAAP net income per diluted share $ 4.66






December 24, December 25, December 27, December 28,2017 2016 2015 2014

US GAAP gross margin $ 4,395,275 $ 2,833,043 $ 2,591,013 $ 2,130,030 Pre-tax non-GAAP items:Amortization related to intangible assets acquired through certain business combinations 86,456 85,000 85,072 85,534 Product and product configuration rationalization - 6,127 - 6,455 Novellus acquisition-related inventory fair value impact - 128 2,149 3,268 Impairment of long-lived assets - - 9,821 - Synthetic lease impairment - - - 1,558 Restructuring charges - - 371 - Non-GAAP gross margin $ 4,481,731 $ 2,924,298 $ 2,688,426 $ 2,226,845 U.S. GAAP gross margin as a percentage of revenue 46.0% 44.4% 43.9% 43.8%Non-GAAP gross margin as a percentage of revenue 46.9% 45.9% 45.6% 45.8%

U.S. GAAP operating expenses $ 1,818,325 $ 1,577,274 $ 1,585,751 $ 1,365,204 Amortization related to intangible assets acquired though certain business combinations (65,653) (64,333) (64,332) (65,250)Cost associated with business process reengineering (9,565) - - - Business combination acquisition and integration related costs (2,029) (43,565) (17,392) - Costs associated with campus consolidation - (11,319) - - Litigation settlement - (4,000) - - Product and product configuration rationalization - (1,650) - (3,008)Restructuring charges - (30) (9,261) (1,915)Synthetic lease impairment - - - (5,356)Impairment of long lived asset - - - (4,000)Costs associated with disposition of business - - - (1,103)Goodwill impairment - - (79,444) - Gain on sale of assets - 15,223 - - Non-GAAP operating expenses $ 1,741,078 $ 1,467,600 $ 1,415,322 $ 1,284,572 Non-GAAP operating income $ 2,740,653 $ 1,456,698 $ 1,273,104 $ 942,273 U.S. GAAP operating margin as a percent of revenue 27.0% 19.7% 17.0% 15.7%Non-GAAP operating margin as a percent of revenue 28.7% 22.9% 21.6% 19.4%

Reconciliation of U.S. GAAP Gross Margin, Operating Expense and Operating Income toNon-GAAP Gross Margin, Operating Expense and Operating Income

(in thousands) (unaudited)Twelve Months Ended

2018 lam research investor meeting

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